Overjoyed, scared, exhilarated, worried - a flurry of emotions may be felt the first time you become a parent. This arrival of your new-born signals the start of a new life stage with new responsibilities beckoning. Moreover, with a little one now financially dependent on you, it amplifies the need to plan to secure your child's financial future. In this article, we suggest 5 things you should do after the birth of your child.
(See "Term or Whole Life - Which Should You Choose?")
#1 Update your benefits
One of the first things you should do is to update your insurance benefits to include your new-born. This could either be for your personal insurance or your company's health benefits. Doing this as soon as possible ensures that you do not miss the deadline for applications thus allowing your child to receive coverage should he/she fall sick or require medical attention.
(See "Do You Really Need Early Critical Illness Insurance?")
#2 Insurance for your new-born
In our previous article "Should You Buy Insurance for Your Child? Here's 3 Quick Tips!", we explained the importance of hospitalisation coverage for your child. This can be obtained through MediShield Life, a basic hospitalisation scheme where all Singaporeans and Permanent Residents (PRs) are automatically enrolled into. Additionally, for more comprehensive health coverage, parents may also wish to apply for an integrated shield plan and rider to complement MediShield Life.
With new-borns generally free from any health issues, applying for additional health insurance at an early age prevents any exclusion from being tied to his/her policy. Premiums are also affordable and can be paid with the Medisave grant that all Singaporean new-borns are eligible for.1 Moreover, if your child is born between 2016 and 2019, he/she may be eligible for a complimentary one year Enhanced IncomeShield, provided through the NTUC good start bundle.2
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(See "All You Need To Know About Personal Accident Plans")
#3 Start saving for your child
It is never too early to start saving for your child's future as an earlier start allows you to be better equipped to provide for his/her future education. Adequate planning can give your child a head start by ensuring that he/she does not miss out on future opportunities due to financial constraints.
To start saving for your child, consider setting aside fixed amounts at regular intervals. This could then be put into a savings plan (FSM Baby Steps Account), investments or children/education oriented endowments to grow your wealth.
(See "The True Cost Of Raising A Child In Singapore")
#4 Plan for emergencies
Would you be financially ready if a disaster were to strike? With children more prone to accidents and illnesses, having an emergency fund could provide a financial safety net for any unexpected expenses.
Additionally, you may also wish to review your own coverage to ensure that it will be sufficient for your needs. This includes having adequate life insurance to safeguard the interests of your child, and allow him/her to be taken care of if anything untoward were to occur. Income replacement plans such as disability or critical illness policies should also be considered as your financial commitment is now higher with a child reliant on you.
(See "How Much Should You Have In Your Emergency Stash?")
#5 Planning your legacy
Wanting only the best for our child, who would you entrust your child to in the event that you are no longer around? To avoid guardianship disputes, consider naming a designated guardian to act as your child’s parent in the event that disaster were to strike.
Planning your legacy and creating a will and/or trust would also guarantee that your child will be well taken care of. This allows you to decide on the allocation of your assets thus ensuring that they are distributed according to your wishes. Additionally, you may also wish to set up a trust for your asset as this permits you to specify when and how the funds are to be used thus making it useful when planning for your child’s future.
(See "Insurance, Is It Always The More The Merrier?")
To Start Planning For Your Child's Future
Or email us at advisory@fundsupermart.com.
Available Products on FSMOne Insurance |
Term Life, Whole Life, Critical Illness, Annuity, Health, Endowment from Etiqa Insurance, Manulife, NTUC Income and Tokio Marine Life Insurance *Please check with our advisory team if the product you want is available on FSMOne Insurance |
1Source: https://www.heybaby.sg/having-and-raising-children/medisave-grant-for-newborns
2Source: https://ntucgoodstart.sg
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